Net income of 607 million yuan ($96 million) compared with
profit of 2.28 billion yuan in 2010, the Urumqi-based company
said today in a preliminary earnings statement based on Chinese
accounting methods. Operating profit fell to 698 million yuan
from 2.7 billion yuan.

Chinese turbine makers including Sinovel Wind Group Co. are
facing headwinds at home after the government tightened its
approval process for projects to ease pressure on the grid.
Goldwind said Feb. 21 it’s diversifying into solar-power
equipment as demand for wind equipment declines, while it also
seeks more turbine orders abroad.

“The degree of competition in the domestic market
regarding wind turbine prices is very intensive,” said Pierre
Lau, head of Asian utility & clean energy research at Citigroup
Inc. Annual production capacity of as much as 25 gigawatts is in
excess of the 15 gigawatts required, he said, pushing down
prices and putting margins under pressure.

Smaller manufacturers and developers will struggle to
compete with the larger makers including Sinovel, Goldwind and
Guodian United Power Technology Co. as prices retreat, said Guo
Shou, a Hong Kong-based analyst at Barclays Capital.

‘Some Consolidation’

“We think there will be some consolidation in China’s wind
industry over the next 12 to 24 months,” said Shou.

At the same time, China is “unabashedly” accelerating its
solar development plan, Shou said. Targets for solar have been
raised to 15 gigawatts by 2015.

Goldwind has boosted turbine orders overseas to counter the
slowing home market using funds from Chinese state-backed banks.
Its “aggressive” expansion plans, coupled with Chinese
financing, may not be enough to counter the domestic slowdown,
Shou said in a research note.

Turbine installations in China doubled each year from 2005
to 2010, when 18.9 gigawatts of machines were added. That pace
stalled last year as China added 18 gigawatts, according to the
Global Wind Energy Council.

Sinovel, China’s biggest wind-turbine maker, said Jan. 30
it expects a decline of more than 50 percent in 2011 earnings
because of competition at home and from rivals including Vestas
Wind Systems A/S of Denmark.